SOCIAL SECURITY

The origins of the contemporary Austrian social security system date
back to the end of the nineteenth century, when rudimentary forms of
social security were introduced for specific occupational groups.
Workers, employees, civil servants, farmers, and the self-employed each
paid into a different social security plan. Workers and employees in Vienna, for example, paid into a different social security fund than did
civil servants in Vienna or farmers in Tirol. The main thrust in the
development of the country's social security system in the twentieth
century has been the creation of a unified social insurance policy for
all occupational groups.

The organization of the social security system is complex. The
General Social Insurance Act of 1955, which has been repeatedly amended,
sets social security policy and makes decisions on deciding such matters
as the level of social security payments and the kind and extent of
benefits. However, tax revenues are collected and benefits are dispersed
by individual insurance agencies or "carriers" for specific
occupational groups. In this respect, the social security system is a
national plan in terms of federal legislation but is not centrally
funded or administered.

The extent of social security coverage and the number of benefits
increased in Austria steadily from the end of World War II until the
early 1980s. As a result, Austria was among the most highly developed
welfare states in the world and had a complicated system of direct taxes
on employers and employees and indirect taxes that financed a broad
spectrum of benefits.

After the early 1980s, social policy entered a phase of consolidation
characterized by difficulties related to funding extensive social
security programs, growing levels of unemployment, stagnating economic
growth, increasing budget deficits, and demographics of an aging
population. However, as of 1993, Austria had managed to maintain its
high level of social security without major reductions in benefits.